Will Draghi encourage euro capitulation?

From a client research note from Standard Bank’s Head of G10 Strategy Steve Barrow.

He says the goal of QE differs between the BOJ and the Fed/BoE, and that the ECB can learn from this.

• ” The aim of Bank of Japan QQE ” is to return inflation to 2% … it will continue to buy bonds until it has done so”
• On the other hand the Federal Reserve and Bank of England “just wanted to get cash into the system after policy rates dropped to near-zero.”
• Says Japan was facing a deflationary trap … Which is nowhere near as likely for the US and UK

He goes on to compare this to the European Central Bank’s situation:

• “In spite of its protestations to the contrary, the ECB does face a serious deflation risk“
• Says then that the the ECB should say it will buy bonds until it has “inflation expectations back to where it wants rather than…pulling some finite figure for QE out of the air – such as EUR1tr.”
• Says then that if Draghi focuses on inflation generation … the ECB can be more like the BOJ than the Federal Reserve/Bank of England … “The answer of course, is just as it has done in Japan: through currency capitulation.”